Acasta has received proposal for $160 million financing facility for acquisitions and general corporate purposes

TORONTO, Dec. 13, 2016 /CNW/ - Acasta Enterprises Inc. (TSX: AEF) ("Acasta") today announced that it is proceeding with its previously disclosed private placement of Class B shares in connection with its qualifying acquisition ("QA"). Based on indications received to date, the private placement will provide at least $100 million of new investment in Acasta at $10.00 per Class B share concurrent with closing of the QA.

The private placement includes indicative commitments of $70 million from certain of Acasta's largest institutional shareholders and new investors, $7 million from vendors of businesses to be acquired in the QA, and $30 million from Acasta Founders, increasing the Founders' total investment in Acasta threefold to $45 million. Subject to regulatory approval, Acasta may increase the size of its private placement.

The previously disclosed vendor redemption backstop of $63 million remains in place.

Value Creation Plan

Acasta's Founders are demonstrating their commitment to Acasta's success by directly linking the realization of their promote to the private equity strategy and value creation initiative for the consumer products platform. In addition to the previously disclosed condition that 50% of the promote shares (the "Contingent Shares") will be contingent on Acasta's share price being $15 (or $18 after 4 years), the following contingencies have been added:

half of the Contingent Shares will be contingent on Acasta raising a private equity fund of at least $1 billion within 2 years; and,

the other half of the Contingent Shares will be contingent on Acasta achieving a value realization event for the consumer products platform (as described below) within 2 years.

Immediately after closing of the QA, Acasta intends to commence the raising of its private equity fund and to accelerate the growth and development of its consumer products platform as a standalone business, which may take the form of a sale to Acasta's private equity fund, a strategic merger with other similar businesses, or a separate public listing of the current platform or resultant combined entity.

Financing Proposal

To underpin its financial strength, Acasta has received a non-binding proposal for a credit facility of over $160 million from a syndicate of Canadian banks for acquisitions and general corporate purposes, and would be in place on closing of the QA.

Shareholders Meeting, ISS Recommendation and Closing

Acasta's special meeting of shareholders (the "Meeting") to approve the QA is scheduled for December 20, 2016.

On December 6, 2016, leading shareholder advisory firm Institutional Shareholder Services Inc. ("ISS") recommended approval of Acasta's qualifying acquisition alongside its launch as a long-term investment and private equity management firm. ISS noted that "In addition, the acquisitions will enable the company to transform into a long-term investment and private equity management firm, which is expected to generate substantial management fees and carried interests."

The QA is scheduled to close on January 3, 2017, subject to the satisfaction of certain conditions as set out in the purchase agreements for the three businesses.

The prospectus and the information circular in respect of the Meeting are available under Acasta's profile on SEDAR at www.sedar.com. Capitalized terms used but not defined herein are as defined in the prospectus.

About Acasta Enterprises Inc.

Acasta is a special purpose acquisition corporation that raised $402.5 million in its initial public offering of Class A restricted voting units of Acasta, in July 2015, with the purpose of effecting a qualifying acquisition. Following the Qualifying Acquisition, Acasta will become a private equity manager and will launch a private equity fund to pursue further market opportunities.

This news release may contain forward‐looking statements (within the meaning of applicable securities laws) which reflect Acasta's current expectations regarding future events. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions.These statements are based on Acasta's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the completion of the initial acquisitions and Acasta's intention to launch as a long-term investment and private equity management firm.

The forward-looking statements in this news release are based on certain assumptions, including without limitation the receipt of any required regulatory and shareholder approvals, and the expected timing related thereto, that Acasta's future objectives and strategies to achieve those objectives will not change, including, without limitation, its plan to raise its first private equity fund and the expectation that no event, change or other circumstance will occur that could give rise to the termination of any of the purchase agreements. The forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the risk that the Qualifying Acquisition may not be completed as planned, and that the Acasta may not succeed in raising its private equity funds. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, Acasta assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.